We are committed to supporting our portfolio companies to build a robust and transparent corporate governance structure and responsible management system. On 30 July, 2020, we requisitioned Luckin Coffee Inc. (the “Company”) to convene an extraordinary general meeting of members (the “EGM”).
An EGM of the Company was held on 5 July 2020 (the “5 July EGM”), requisitioned by Haode Investment Inc (“Haode”), a company controlled at the time by the former chairman of the Board of Directors of the Company (the “Board”). The timing of the 5 July EGM, the subsequent liquidation process of Haode, and the resolutions proposed by Haode in the 5 July EGM, caused concerns over the independence of the directors nominated by Haode and elected in the 5 July EGM.
It is important that there be no doubt as to the bona fides and ability to exercise independent judgment of any board member in order for the Company to be able to properly function and for the directors to fulfill their fiduciary duties.
Mr Sean Shao had been an independent director and chair of the audit committee of the Company since May 2019, and the chair of the special committee of the Board (the “Special Committee”) since March 2020. In his capacity as the chair of the Special Committee, he led the independent investigation of the Company. He was removed from the Board in the 5 July EGM. His reinstatement will allow for the Board to fully implement the remedial measures as recommended by the Special Committee, and to further facilitate any process related thereto.
The proposed resolutions are necessary actions in order that the Company’s Board can be properly constituted.
China-focused Centurium Capital has enjoyed a productive 12 months, closing its debut US dollar fund, deploying most of the capital, and securing an early liquidity event.
Pictured: Michael Chen, a partner at Centurium Capital, accepts the Firm of the Year – Mid Cap award
This story was authorized by Asia Venture Capital Journal (AVCJ) to run on the corporate website of Centurium Capital. Please click here for the original piece published by AVCJ on January 30, 2020.
By Tim Burroughs
For much of the past decade, China Biologic Products benefited from strong industry tailwinds. It was operating in a seller’s market – underpenetrated, undersupplied, and with little need to offer a differentiated message to a stable client base. Those supply-demand dynamics have changed. There is more competition, but the company doesn’t have the skillsets to carve out an edge through better sales and marketing or operational efficiencies that can ease pressure on the bottom line.
Making the necessary operational refinements isn’t easy in the full glare of the public markets. In August 2018, a consortium of private equity investors made a substantial commitment to in terms of capital and reform. Four months ago, the same investors launched a take-private bid. The include Centurium Capital, a PE firm established by David Li, who backed China Biologic during the expansion period with Warburg Pincus and now promises a very different type of solution.
China Biologic isn’t unique within the Centurium portfolio. The firm closed its debut US dollar-denominated fund at just over $2 billion in mid-2019 and has since committed 80% of the capital to seven companies, with two more deals pending announcement. More than half the corpus has been deployed in control transactions involving traditional businesses that recognize the need for a meaningful response to a rapidly evolving commercial environment.
“Chinese companies have been used to easy growth, with high tides raising all boats. They haven’t been through down cycles,” says Li. “Now with a slowing market and increasing competition from new models and technologies, they are faced with challenges they haven’t dealt with before, and they are looking for solutions and advice. Often this involves restructuring management and systems, so they can run more efficiently, and continue to grow the bottom line.”
Turning points
Transformation sits at the heart of Centurium’s strategy, but it is applied in different forms and contexts. Li estimates the split is 60-40 between efficiency-driven turnarounds of traditional businesses and growth plays for nascent companies with technology-enabled solutions that can disrupt traditional consumption patterns. However, there is plentiful middle ground. Equally, Centurium might find itself dealing with complexities that arise from convoluted capital structures or management teams and systems that can no longer sustain expansion.
Luckin Coffee is the firm’s best-known investment, having risen from nothing to become China’s second-largest coffee shop chain within the space of two years. Its IPO in May 2019 represented Centurium’s first liquidity event. The Centurium team was involved in the development of Luckin’s business model – its founder was previously COO of CAR and Ucar, both companies that Li backed while at Warburg Pincus – which is said to rely heavily on technology to deliver supply chain efficiencies and customer insights.
Some of the other investments are not so different in terms of mode of engagement. Centurium spent two years working with eyewear brand Loho before committing any capital. Since then, the company has expanded from fewer than 400 stores to nearly 700, but the key changes were in supply chain management: reducing the time taken for a new design to go from conception to launch, which means the company responds to demand trends faster and takes less inventory risk.
Brains trust
At one point, the private equity firm advised Loho to slow the pace of new store openings to allow for proper assessment of store unit economics. Maximizing supply chain efficiency has implications for store location, size and operating structure – Loho shifted from a directly-owned to a franchise model – the interaction between online and offline channels, and human resources. Centurium would provide feedback through daily interactions with senior management.
“We are very operational and strategic centric, but we don’t run an outsourced consulting model, which some of the global PE firms have tried to do in China and not with much success,” says Li. “Our deals often involve significant operational transformation, so we need strong leadership – people who have a lot of credibility and authority and who approach things with an owner mentality. Once we put the right systems in place, we can recruit from outside or promote from within and have people run the business.”
Centurium’s strategy lends itself to a concentrated portfolio. There are likely to be no more than a dozen companies in Fund I, with check sizes of around $300 million for control transactions and $80-100 million for deals in which it takes a significant minority interest. The firm has a team of approximately 20 investment professionals, including an in-house operations function.
This represents a relatively rapid built-out for a firm that is barely three years old and spent its formative period deploying renminbi funds before launching a US dollar vehicle in 2018. Asked to identify the major challenges in setting up a new GP, Li highlights the need to combine global best practices with local insights and experience in order to provide bespoke solutions to Chinese companies.
“This requires us building an institution that is differentiated in terms of culture, process and structure, which is an exciting exercise,” he explains.
January 25, 2020, Beijing – Centurium Capital today donated RMB2 million to Hubei Charity Federation’s special fund to help hospitals and local authorities fight the recent novel coronavirus pneumonia outbreak, which originated from Wuhan, Hubei’s provincial city and most severely hit.
At the time of Centurium Capital’s donation this morning, China has confirmed 1,287 cases and 41 deaths, as the contagious illness continues to spread across the country, so far affecting 30 provincial-level regions.
January 21, 2020, Beijing – Centurium Capital (“Centurium” or the “Firm”), a leading private equity firm in China, announced today that it has completed an investment of over US$ 300 million into ANE Logistics (“ANE” or the “Company”). ANE, the leading less-than-truckload (“LTL”) trucking logistics company in China, plans to use the financing to invest in technology and operations to further solidify its market leadership position.
ANE’s daily LTL shipments reached close to 40,000
tons and its total number of franchise depots was over 20,000 as of December
2019, covering 96% of towns and townships in China.
With a growing and well-run network of depots and
trunk-lines, ANE has been steadily improving its profitability through
effective cost management and increased operational efficiency.
Yongjun Wang, Chairman of ANE, commented, “The
trend towards concentration in China’s logistics industry is obvious. We see
great opportunities over the next five years to expand our network, optimize
operational efficiency and improve service quality. We will work hard to
achieve the strategic goal of an average daily cargo volume of 100,000 tons and
a market value of over RMB100 billion ($14 billion).”
Michael Chen, Partner of Centurium, commented, “ANE
Logistics is a clear leader in China’s LTL logistics sector and a pioneer with an
innovative, technology-driven franchise model providing quality solutions to
its clients. We believe that our capital and support will assist the company in
its goal to further consolidate the market and solidify its leadership
position.”
Centurium’s investment philosophy is to identify investment opportunities in China’s rapidly expanding consumer, services, and healthcare sectors, with an investment strategy centered around the need to “Invest to Transform”. Moreover, the Firm brings a hands-on and operations-centric approach to improve operational efficiency and solve structural deficiencies. Investments made by the Firm include, among other, Luckin Coffee (NASDAQ: LK), China Biologic Products (NASDAQ: CBPO), LOHO and UIB.
January 18, 2020, Beijing – Yunxuetang (“YXT”, or “the Company”), a leading corporate training SaaS and services provider in China, announced today that the company has completed Series D financing round of US$100 million led by Centurium Capital (“the firm”, or “Centurium”), and participated by existing investors YF Capital and SIG. The company has previously raised six rounds of financing totaling US$200 million. According to Ruize Lu, Founder of Yunxuetang, the capital will be used to invest in content development and professional services capabilities enhancement.
Founded in 2011, Yunxuetang provides one-stop training solutions including SaaS, content development and services to thousands of big corporate clients and nearly 30,000 SMEs. Headquartered in Beijing and Suzhou, the company has branch offices in over 20 Chinese cities including Shenzhen and Hangzhou.
Yunxuetang’s
total solutions include training infrastructure establishment, training
materials development, training program maintenance, data analysis and vendor
management to meet increasing demands for more efficient staff training as
Chinese companies grow and evolve.
Gary Liu, Executive Director of Centurium Capital, commented, “We are confident of the long-term growth prospects of the business services sector. Yunxuetang’s business model of integrating SaaS, content and services significantly increased the efficiency and quality of staff training efforts of its clients. The core team of Yunxuetang are well respected industry veterans with many years of experience in technology, content development and business services.”
The
market size of the corporate training industry reached RMB294 billion in 2018,
according to a report by Training magazine. While substantial in size,
the industry remains fragmented and without clear market leaders; providing ample
opportunities for consolidation.
Ruize Lu, Founder of Yunxuetang, commented, “Other than online training, it has been an emerging trend for training service providers to be able to generate and intelligently match training materials for staff at different levels and positions. Leveraging its resources and innovative SaaS platform, Yunxuetang is developing high-quality training materials and products to meet client demands.”
Centurium’s investment philosophy is to identify investment opportunities in China’s rapidly expanding consumer, services, and healthcare sectors, with an investment strategy centered around the need to “Invest to Transform”. Moreover, the Firm brings a hands-on and operations-centric approach to improve operational efficiency and solve structural deficiencies. Investments made by the Firm include, among other, Luckin Coffee (NASDAQ: LK), China Biologic Products (NASDAQ: CBPO), LOHO and UIB.
Hong Kong, November 11, 2019 –– Centurium Capital secured “Firm of the Year – Mid Cap” prize which was announced and presented at the 2019 AVCJ Private Equity & Venture Capital Awards dinner in Hong Kong.
As the industry’s premier information
source, the Asian Venture Capital Journal tasks itself with highlighting the
firms, professionals, investments, exits and fundraises that are a cut above
the rest.
The AVCJ awards have become a mark of distinction in Asian private equity, and a showcase for first-class innovation, ingenuity and performance. They are also unique in the region in how they are distributed – relying primarily on nominations and votes cast by Asia’s entire private equity and venture capital community, but with contributions from a select panel of industry judges as well as the AVCJ Editorial Board. To be selected as a winner is to be truly acknowledged as preeminent.
AVCJ highlighted Centurium Capital’s strategy, fundraising and investment activities in 2019 at the Awards ceremony: “When Centurium Capital closed its debut US dollar fund at $2 billion in July 2019, it had already deployed 40% of the corpus across five deals and secured one liquidity event. The GP raised twice the targeted amount of an investment strategy rooted in the technology-enabled transformation. Early evidence of this came in the form of Luckin Coffee, which leverages technology to deliver supply chain efficiencies and customer insights. Centurium led the company’s series A and B rounds and was the largest external investor when it listed in May. Other investments included LOHO and China Biologic Products.”
Centurium
Capital is a leading private equity investment firm in China and manages
multiple RMB and US dollar funds, with a primary focus on China’s consumer,
service and healthcare sectors. With best-in-class domain knowledge and sector
resources, Centurium Capital is committed to disciplined approach and
significant equity commitment to ensure deep engagement with invested companies
and create long term shareholder value.
September 20, 2019 – Illuvator CoreX, China’s leading artificial
intelligence chipmaker and solution provider, announced today that it has
completed B-round financing led by Centurium Capital and Princeville Capital,
and participated by Shanghai Electric Hong Kong and Bangsheng Capital. The
funding will be used to enhance the company’s R&D efforts, market
expansion, customer development and mass production.
Founded in 2015 by experts returned from Silicon Valley,
Illuvator CoreX develops enterprise AI software and hardware products, platform
and cloud-based AI solutions. The company has R&D centers in Shanghai,
Beijing, Silicon Valley and Nanjing, led by Founder and CEO Li Yunpeng, who was
the technology director of Oracle’s core database department. During his tenure
at Oracle, he made important contributions to the successful launch of over 10
versions of Exadata.
Illuvator CoreX targets the AI-enabled high-performance data
processing market and features proprietary high-end/cloud-based universal chips
and applications, aiming to solve the core capacity issues in today’s AI era.
Industry estimates predict global AI chips market will reach US$
34.3 billion in 2023 including over US$8.3 billion from China. Li Yunpeng,
founder and CEO of Illuvator CoreX, commented that the industry is facing a
turning point for increasing demand, and the company will continue to focus on
integrated software and hardware approach to deliver full package of solutions
that cover all scenarios of calculation capacity.
Beijing, China, July 17, 2019 –– Centurium Capital, a leading private equity firm in China, today announced that Michael Chen had joined the firm as Managing Director. In this new role, Mr. Chen will work closely with Mr. David Li, Chairman and CEO of Centurium Capital, in managing investment activities of the firm.
Mr. Chen
has a proven track record as an experienced and successful private equity investor.
Before joining Centurium, Mr. Chen was a Managing Director of Warburg Pincus leading
its consumer investments in China. During his tenure at Warburg Pincus since
2011, he led a number of investments into leading Chinese companies in transportation
and mobility, retail, logistics and education industries.
Mr. Chen commented, “China has come into a new era of real
economy and capital market , with both opportunies and challenges. Chinese
home-grown private equity firms are well equipped to provide tailor-made
solutions for Chinese companies in this new era. With an experienced team, as
well as deep sector insights and operational capabilities, Centurium Capital is
well postioned to ride this wave and create value for both our portfolio companies
and our investors. I’m very excited to join the team and look forward to helping
build Centurium into one of the top private equity firms in China.”
Mr. David Li, Chairman and CEO of Centurium Capital,
commented, “Michael brings a wealth of expertise and resources through his many
years of experience in investment. As the macro trends of consumption upgrade,
industry consolidation and technology-driven business innovation continue, Centurium
is committed to investing into transformational opportunities to drive portfolio
growth. With Michael on board, our investment team is further enhanced, and he
will bring tremendous value in our efforts in investment, fundraising and
operational suppport to our portfolio companies.”
Prior to
joining Warburg Pincus, Mr. Chen was a vice president at Crescent Point, a
Pan-Asia growth capital fund. Before Crescent Point, Mr. Chen worked in the
investment banking division of Morgan Stanley in Hong Kong and Accenture in
China. He received a B.A. of Economics from Fudan University and an M.B.A. from
INSEAD.
Centurium Capital is a leading private equity firm in China. With deep domain knowledge and sector resources, Centurium Capital primarily focuses on investing into the China consumer and healthcare sectors. Since its inception, Centurium Capital has received strong support from world-wide leading institutional investors including pension funds, sovereign wealth funds, family offices, corporates and FOFs. The firm seeks to invest in control or significant minority private equity stakes with a particular focus on in-depth engagement to improve operational efficiency and solve structural deficiencies.
Beijing, China, July 3, 2019 – Centurium Capital, a leading private equity firm in China, today announced the successful close of its debut US dollar fund, Centurium Capital Partners 2018 L.P. at over US$2 billion, far exceeding its target size. The fund has secured overwhelming interests from global institutional investors including pension funds, sovereign wealth funds, family offices, corporate pensions, FOFs, and other financial institutions. The fund was launched in March 2018 and reached a significant first close of nearly US$1 billion in June 2018.
Centurium Capital primarily focuses on investing
into China’s consumer, services and healthcare sectors. The firm’s investment
theses are built around its core investment strategy of “invest to transform”.
Centurium seeks to invest in control or significant minority private equity
stakes with a particular focus on in-depth engagement to improve operational
efficiency and solve structural deficiencies.
David Li, Chairman and CEO of Centurium Capital,
commented, “The successful fundraise is a vote of confidence in China’s long
term growth potential by global investors, as well as a strong testament to our
firm’s strategy and ability of investing to transform. In the context of
China’s new norm of economic growth model and fast-evolving business landscape,
Chinese companies and entrepreneurs are faced with unprecedented new challenges
as well as new opportunities. With a unique combination of global best practice
and local expertise and experience, Centurium Capital is well positioned to
provide bespoke solutions to these challenges and opportunities by being a long
term partner of capital and mindshare to our portfolio companies and
entrepreneurs”.
Since its first close, Centurium Capital has made a number of investments, including Luckin Coffee (NASDAQ: LK), a leading internet based on demand coffee brand and retail chain in China, China Biologic Products (NASDAQ: CBPO), one of the largest plasma-based biopharmaceutical companies in China, and LOHO, China’s leading fast-fashion eyewear brand and retailer with a vertically integrated supply chain.
京公网安备 11010502038287号